Canadian court to Iran: Pay hostages’ legal bill

Canadian court to Iran: Pay hostages’ legal bill

In a blow to Iran’s diplomatic immunity, Ontario’s Court of Appeal has ordered the country to pay court costs to Americans once held hostage by Iranian-backed terrorists, despite Tehran’s claim that it is unaccountable to Canadian courts.

The highly unusual order comes as claims against Iran for supporting international terrorism mount in Canadian courts. The cases are being brought by foreign terror victims seeking compensation through Iran’s assets in Canada.

This strange case produced a fittingly strange outcome: two levels of Canadian courts accepted that, under the laws at the time of the kidnapping, Iran was exempt from being sued, but the court nevertheless ordered the Islamic regime to pay $70,000 in legal fees to the plaintiffs.

Further, Canada’s Justice for Victims of Terrorism Act, which became law last March, has now changed the legal landscape: the kidnapping victims have filed a fresh claim in Toronto under the new law looking to settle outstanding U.S. court judgments of almost US$350-million against Iran.

Iran has not filed a defence against the new claim.

The roots of the case are found in the anguish of the Lebanon hostage crisis of the 1980s, when Hezbollah terrorists, acting for Tehran, abducted 96 people in Lebanon, mostly Westerners, and held them hostage in Beirut.

Alann Steen and David Jacobsen, both Americans, are former hostages: Mr. Steen was held for 1,775 days; Mr. Jacobson for 532 days. The Ontario courts acknowledged they were held “in unspeakably inhumane and brutal conditions.”

In 2003, a U.S. court awarded Mr. Steen more than US$342-million in damages against Iran, accepting that Iran was ultimately behind the abductions. In 2006, the Jacobsen family won a US$6.4-million judgment against the Islamic regime.

Unable to collect the damages in the United States, Mr. Steen and the family of Mr. Jacobsen turned to Canadian courts in 2010, seeking to secure Iran’s assets here to satisfy the U.S. judgments.

(Mr. Jacobsen settled his claim prior to Iran’s assets being frozen in the U.S. and is not a party to the Ontario action. His three children and sister, however, are plaintiffs here.)

The victims argued that, while governments are immune from the jurisdiction of foreign courts, the State Immunity Act allowed one exemption: a government’s “commercial activity” was vulnerable.

“We were trying to convince the court that kidnapping for ransom amounted to a commercial activity,” said Mark Arnold, a lawyer for the victims, in an interview.

“I do not accept that the exchange of human beings for weapons and money falls within the ordinary meaning of commercial activity,” she wrote. “The fact that Iran demanded the payment of money and weapons before releasing Mr. Jacobsen and Mr. Steen does not alter the true nature of hostage taking as a brutal criminal act.”

But Justice Corrick also made the unusual order that the winning party, Iran, must pay the losers’ $70,000 in legal costs.

Both decisions — dismissing the claim and awarding costs — were appealed, leading to Monday’s court of appeal ruling.

Iran argued in court that Canada’s justice system did not have the jurisdiction to make a costs award against Iran, given the country’s sovereign immunity.

The appeal court accepted both of Judge Corrick’s decisions.

If the court doesn’t have jurisdiction over a defendant then the court doesn’t have jurisdiction over anything with that defendant

Mr. Arnold said he was “delighted” with the cost award but “deeply disappointed” the commercial activity exemption was not applied.

“The court had an opportunity and declined to be creative and put the issues of trade in money and trade in oil on a higher plane than the trade in human beings,” he said in an interview.

He hopes that will change when the new claim is heard.

Barbra Miller, one of three lawyers representing Iran, said she was disappointed that the court did not uphold Iran’s claim of immunity.

“It is a very controversial client but the law is the law,” she said in an interview. “If the court doesn’t have jurisdiction over a defendant then the court doesn’t have jurisdiction over anything with that defendant,” she said.

Both Judge Corrick and the three appeal court judges, led by Justice Robert Armstrong, heard how the events of notorious international geopolitics ended up in their courtrooms.

The abductions in Lebanon had their seeds in the attack on the U.S. embassy in Tehran in 1979 by Ayatollah Khomeini’s supporters. The 52 embassy hostages were eventually freed in exchange for the U.S. releasing more than $3-billion in frozen Iranian assets, with more money to be delivered later.

As payment slowed, Iran, in need of money for its war with Iraq, directed Hezbollah to kidnap Western citizens, the court heard.

Mr. Jacobsen was the head of the American University of Beirut Medical Center when he was grabbed off the street on May 28, 1985. He was beaten, starved and shackled to the floor of a dark, dirty, basement wearing only underwear and a T-shirt.

He was released on Nov. 2, 1986.

Mr. Steen was teaching at Beirut University College when he and seven others were called to a meeting with the Lebanese army to discuss their security on Jan. 24, 1987. The army officials, however, were imposters and the Westerners were hooded and handcuffed at gunpoint.

Mr. Steen’s captors believed him to be a CIA agent because he was a former U.S. Marine and they treated him particularly harshly. After an escape attempt, he was badly beaten; a serious head injury went untreated.

When he was finally freed after almost five years, he was unable to walk. He has suffered from seizures and deteriorating health, court heard.

In November, an Ontario judge in a different case issued a restraining order against property in Canada owned by the Iranian regime, including its embassy in Ottawa and a former cultural centre in Toronto. The property was frozen while the family of an American woman killed in an Iranian-funded terrorist attack in Jerusalem tries to collect a $13-million judgment ordered against Tehran by a U.S. court.

That case, by the family of Marla Bennett, is still before the courts.

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